“The team was recently visible advising on a number of pharmaceutical cases. Sources agree that the team is “moving in the right direction” and are particularly impressed by its work in the pharmaceutical sector”.

Registration of a company, Crimea

On March 24, 2014, the Ministry of Justice of Ukraine published Order “On registration of change of registered office address of legal entities and residence of individual entrepreneurs”, No. 525/5 of March 14, 2014.

The order sets forth that changes of registered office address of legal entities and residence of individual entrepreneurs located/residing in the Autonomous Republic of Crimea and the city of Sevastopol are registered by the state registrars of legal entities and individual entrepreneurs of territorial registration offices of the Ministry of Justice in the regions and the city of Kyiv (hereinafter, the state registrars).
The rule does not apply to change of registered office address of legal entities and residence of individual entrepreneurs in the Autonomous Republic of Crimea and the city of Sevastopol.

State registrars performing such registration must notify of the need to transfer the registration file of a legal entity and/or individual entrepreneur at their new location sending the relevant notification by mail, telephone message, electronic communication, etc. to the state registrars of territorial registration offices of the Ministry of Justice of Ukraine in the Autonomous Republic of Crimea and the city of Sevastopol at the storage place of the registration file.

The order also envisages transfer of registration files not only by mail pursuant to Article 14 of the Law of Ukraine “On state registration of legal entities and individual entrepreneurs”, but also by provision of the registration file at request of the authorized representatives of legal entities and individual entrepreneurs against signed receipt on its mandatory transfer to the state registrar at a new location of legal entities and residence of individual entrepreneurs.

The order cannot authorize control over the entrepreneurs’ Crimea assets, but may be useful during further registration of such enterprises at their new location, e.g. selling them with their relevant assets by selling their members’ corporate rights and change in the composition of members, as well as preservation of registration files.

It shall be noted that the Ukrainian legislation envisages mandatory information about location in charters for some business entities (e.g. it is mandatory for limited liability companies being the most common legal entities in Ukraine). Accordingly, change of registered office address in this case is accompanied by the general meeting of members and appropriate amendments to the charter to be submitted for state registration concurrently with change of registered office address. The registration is conducted on the basis of the registration card No. 3.

Obviously, due to situation in the Crimea not all companies will have access to their constituent documents and seals and will be able to hold the general meeting of members promptly. Considering that permits for production of seals were canceled a few years ago, in my opinion, the issue can be resolved through production of a new seal by the company officer and filing of the registration card No. 4 submitted by legal entities, which location is not specified in their charters and its change does not require the relevant amendment of their charters. I think that the state registrars will understand the problem and carry out the relevant registration in this case.

It is also worth noting that in some cases change of location can still cause problems. Indeed, it will be difficult for the bankrupt companies in liquidation, as pursuant to Art. 35(2) of the Law of Ukraine “On state registration of legal entities and individual entrepreneurs”, some registration actions are prohibited as regards such legal entities, in particular state registration of changes of their location recorded in the Unified State Register of Legal Entities and Individual Entrepreneurs. In my opinion, this issue shall be also resolved.

Further, whereas it is possible to predict complications firstly regarding technical capability to meet provisions on transfer of registration files by the Crimean state registrars, it is expedient to start thinking of how the state registrars, who register change of location, will actually keep registration files of the “Crimean” entrepreneurs. For example, if the subjects of entrepreneurial activity have constituent and registration documents, it is possible to introduce the procedure whereby the state registrar may be provided with copies of available documents and the original copies, and the state registrar will be able to certify the copies, which will constitute the registration file.

The “reverse side” is that some entrepreneurs in continental Ukraine would like to prevent access to their registration files by the Ukrainian courts and law enforcement agencies. To this end, such persons have already begun to change registered office address of their companies to the Crimea since change of location means obligation of the state registrar to transfer the registration file to a new location. Surely, the state registrars and Ukrderzhreyestr try to influence the situation within their powers, but the problem shall be also addressed at the legislative level.

I would note that the need to somehow resolve the issue with the Ukrainian entrepreneurs registered in the Crimea is conditioned by rapid annexation of the latter, and this problem is really urgent like many other problems arising in connection with the actions of the Russian Federation. However, in my opinion, the issue shall be resolved properly by introducing the appropriate amendments to the Law of Ukraine “On state registration of legal entities and individual entrepreneurs”.

In particular, pursuant to Art. 5, state registration of legal entities and individual entrepreneurs is conducted by the state registrar at the location of a legal entity or residence of an individual, and Art. 14 does not provide for handing the registration files to the subjects of entrepreneurial activity. It would be expedient to introduce the appropriate amendments to the Law, because even if the state registrars of the continental Ukraine meet the provisions of the order, it is unclear how the state registrars in the Crimea will behave. It cannot be ruled out that they will ignore the order considering invariability of the law. In addition, the discrepancies between the law and the order may serve as a ground for appeal against registration conducted pursuant to this order in court, and as a result, the latter can be cancelled.